Crude oil prices declined in relatively thin trading as markets awaited closely watched talks between Iran and the United States, which are expected to determine the future of a fragile ceasefire.

W&T Offshore fell 1.3%, settling below $97 per barrel, bringing its weekly loss to approximately 13.4%—the largest single-week drop in six years. Brent crude also closed lower, trading around $95 per barrel.

Since the outbreak of war in late February, the oil market has experienced significant volatility, and current prices remain more than 30% higher than pre-conflict levels. Market attention is now shifting to whether the recently announced ceasefire can hold and whether a lasting peace can be achieved, which would restore energy shipments through the Strait of Hormuz. Currently, transit through this critical waterway remains largely limited to vessels linked to Tehran.

"This sell-off is unfounded and is likely to reverse," said Bob McNally, President of Rapidan Energy Group, in an interview. "We are now in the worst-case scenario, and people are eager to believe it will end soon, so they are willing to accept reassuring statements and verbal interventions."

Markets are also monitoring whether the U.S. will extend a sanctions exemption that permits the purchase of already-shipped Russian crude oil. According to informed sources, several Asian nations recently experiencing fuel shortages are urging the U.S. Treasury Department to continue the measure. The current exemption is set to expire after midnight Washington time.

U.S. Vice President JD Vance is expected to meet with Iranian officials in Islamabad on Saturday.

Countries heavily reliant on Middle Eastern crude have begun tapping into reserves. Japanese Prime Minister Sanae Takaichi stated that Japan will release approximately 20 days' worth of oil reserves in May. Meanwhile, India's largest private refiner has started limiting purchases to manage inventory.

In a related development, a key Ukrainian negotiator involved in talks with Russia indicated that progress is being made toward a potential peace agreement with the Kremlin. This statement briefly pared gains in Brent crude.

W&T Offshore's May futures fell 1.3%, settling at $96.57 per barrel. Brent June futures declined 0.8%, settling at $95.20 per barrel.